Barclays has upgraded Oscar Health Inc. to “overweight” and increased its stock price target from $30 to $35. The firm believes that the displacement of entry-level office workers by artificial intelligence could transform the individual market for ACA insurance into the fastest-growing segment of U.S. health insurance over the next five to ten years.
This thesis is supported by Anthropic CEO Dario Amodei’s prediction that “AI will displace 50% of entry-level office workers within 1-5 years.”
Barclays analysts highlighted that a more significant consequence might not be unemployment itself, but rather “a loosening of the link between employment and health benefits,” considering that approximately half of the U.S. population receives health insurance through an employer.
Historical data indicates a strong correlation between these factors. During the dot-com crash from 2000 to 2003, employer-sponsored insurance enrollment decreased by 2.5% amid a 200-basis-point increase in unemployment.
During the Global Financial Crisis, unemployment rose by 500 basis points, and enrollment in Employer-Sponsored Insurance (ESI) dropped by 5.4%. During the COVID-19 pandemic, a 300-basis-point rise in unemployment led to a 2.3% decline in ESI coverage, according to U.S. Census Bureau data cited in the report.
Post-COVID-19 pandemic trends suggest that the ACA marketplace has become a more significant insurance backstop than Medicaid. Individual ACA enrollment grew by 21% between 2019 and 2021, outpacing Medicaid’s 11% growth during the same period, the report stated.
Barclays projects annual growth in ACA exchange enrollment at 5-6% through 2030, while Medicare Advantage is expected to grow by 3.0-3.5%, and employer-sponsored group insurance risks shrinking by 4.0-5.0%.
The brokerage anticipates ACA enrollment to reach 24.03 million by 2030, compared to 19.44 million in 2026.
U.S. Bureau of Labor Statistics data, referenced in the report, shows that since 2023, unemployment among college graduates has been rising faster than the national average, and employment for individuals aged 16-24 is lagging behind the overall labor market.
According to U.S. Bureau of Labor Statistics data in the report, gig economy workers now account for nearly 15% of total employment—a 24% increase since 2017—with approximately 85% of them holding health insurance.
For Oscar Health, Barclays set a 2028 EPS estimate of $2.74 and applied a 14x multiple, up from the previous 12x. The brokerage forecasts Oscar’s revenue to grow from $11.70 billion in 2025 to $27.37 billion in 2028, representing a compound annual growth rate of 32.7%.
For Centene, Barclays maintained an “overweight” rating with a $75 price target, pointing to an optimistic 2028 EPS scenario of $9.04 and a potential share value of around $120 at a 13x multiple.
Cigna was identified as the most vulnerable company, with 73% of its insurance portfolio comprised of employer-sponsored coverage and 23% from technology sector clients, the highest proportion among the analyzed peer companies.
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